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Local Small Business Leaders Tell Congress They Want More Control and Mentorship

Nicole Erwin
U.S. House Small Business Committee member James Comer held a congressional field hearing in Paducah

West Kentucky small business owners are voicing concern that legal complexities could stave off future efforts in the region. Banking, tech, entrepreneurship and government contracting leaders provided testimony to U.S. House Small Business Committee member and first district Congressman James Comer, in a field hearing in Paducah this week.

"Small businesses are the backbone of the American economy, supporting more than 696 thousand employees in Kentucky alone," Comer said.  He asked a panel what Congress could do to stimulate new business in the region while helping existing small business owners grow.

Edward Musselman owns the restored Paducah Coke Plant. He said the current business environment is not for the faint of heart and that his desire to succeed outweighed complications in the Small Business Administration loan application process.

SBA provides small businesses with financing options "from the smallest needs in microlending - to substantial debt and equity investment capital (venture capital)."

"Why is the climb so steep to get a small business around all the naysayers and powers that be that control to get open and operating successfully?" Musselman said.

Musselman said that SBA loans require businesses to adhere to a one-size-fits-all check list.

He also said the federal historic tax credit limits entrepreneurs restoring historic properties by restricting generated revenue to rental income only.

"You have to be generating income through rents in excess of a certain dollar figure to be able to start chipping away at this tax credit," Musselman explained. "A lot of these entrepreneurs doing rehabilitation on a historic building and putting a business in there, well that business is basically an active income, so you are generating income taxable by the government, that you can’t apply the tax credit to, and that is exactly our situation," he said.

Community Banking

Bruce Kimbell, president of First Community Bank of the Heartland said SBA loans are not only critical in the bank's ability to provide economic growth, but also in supporting regional ag producers.  "As for any other program there is some room for improvement," Kimbell said.

"Primarily relating to the servicing of SBA loans. We should be able to enable consolidation or refinancing by the same lender of a single borrower, provide a carve out for small portfolio lenders, such as us and other community banks, to obtain a guarantee to avoid regulatory loans to one borrower limitation," he said.

Kimbell also said he would like more local control in the decision making process of loan applications. He said applications are sent to a department in California and can take up to a year to process for approval. If the applications were allowed at the local level, he said it wouldn’t take more than 60 days.

Government Contracting Procurement

President of Swift and Staley Inc. Leon Owens asked Comer to have the Congressional Small Business Committee reevaluate how small businesses are defined within the 'small business size standard.'

Owens said that Swift and Staley has operated with a revenue base of $38.5 million on three year rolling average. But because the company obtained additional work to support a client in 2014-2016, Swift and Stanley exceeded the revenue for threshold for 2017.

Owens explained, "based on that we were unable to competitively bid on any small business set aside procurements."

Owens would like to see more of a buffer in revenue thresholds that place companies within current confines of the small business size to encourage growth potential.  


Jonas Neihoff, owner of digital services company Socially Present, said the biggest obstacle to starting a new business is the complexity of the environment and government loophole navigation. "It seems like half the time we meet with people, by the time they have their business plan together it's not even relevant anymore because things change so quick," he said that the speed of government approval doesn’t match that of advancing technology.

Neihoff said that a mentor was his greatest resource when starting his business because of the advice they could offer in navigating the "complex ecosystem."

"Everything has become way too complicated, there are barriers to entry, both financial and through a lack of education and knowledge on how to access that funding."  Neihoff asked Comer to incentivize mentorship opportunities for new business owners.

Both Musselman and Neihoff credited Murray State University's Small Business Development Center as a critical resource for success but said that due to a lack of its own resources it can’t always meet the needs of the region.  

After the hearing, Comer said, "we have and education system that needs to be tweaked. We certainly have a shortage of skilled workers in the workforce today."

"One of the things that is on the table that we need to focus on more on education is apprenticeships, mentorships--so this is going to be an issue moving forward. I’m a big proponent of that," Comer said.

Testimony at the hearing will be submitted to the Small Business Committee in Washington to determine future legislative decisions after the August session, said Comer.

"Whether it is the healthcare mandate for federal businesses, [...] the tax credit on the federal level being set up different than it is, whether it is the regulations at the community banks, whether it is changing the definition of changing the size of a small business for the DOE contractors here," Comer said there are things that Congress can do to be able to help foster continued growth for these small businesses.

Nicole Erwin is a Murray native and started working at WKMS during her time at Murray State University as a Psychology undergraduate student. Nicole left her job as a PTL dispatcher to join the newsroom after she was hired by former News Director Bryan Bartlett. Since, Nicole has completed a Masters in Sustainable Development from Monash University in Melbourne, Australia where she lived for 2 1/2 years.
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